Why Do I Have to Sign Paperwork Just to See a House?
Why Do I Have to Sign Paperwork Just to See a House? Should you have your own Buyer’s Agent?
When you request to view a home, the agent may request a Buyer’s Rep Agreement before showing you the house. You’d probably like to know why! The good news is, it’s for everyone’s benefit. The form is the Residential Buyer/Tenant Representation Agreement. It is a contract between you (the client) and the REALTOR / Broker that is showing you the property. The agreement spells out how she will work for YOU and represent YOUR best interests in the transaction and also spells out how the broker is paid.
Why is a Buyer’s Rep Agreement good for you?
- Your Agent represents YOU and is your advocate during the transaction
- Is your contact throughout the entire buying process–will hold you hand and make sure everything is completed on time and the way you want it.
- Will help you with financing suggestions
- Finding the property and providing objective information about each property (and it’s true market value!) and also providing local community information on utilities, zoning, real estate taxes, current market conditions, schools, etc.
- Your Buyers agent is negotiating for YOU! There are many factors that go into successful negotiations, including but not limited to: price, financing, terms, date of possession, repairs and appliances. When you have a buyer’s agent, you are their only client in the transaction. They have no loyalty to the seller, the only loyalty is to YOU! Your needs come first!
- Your agent will provide due diligence during the inspection period, which may include: general property inspections, termite inspections, septic and well tests, and more. Your agent can assist you in locating and coordinating the inspection professionals and will be with you at the inspections.
- Your agent will be with you at closing to make sure everything YOU need in the transaction is done correctly and timely.
- The agreement can be for any amount of time–from a few hours to months or longer. So, if you’re not 100% ready to commit, it’s okay! The good news is, you can commit to one house or one afternoon until you are comfortable that you are working with the right agent!
A Buyer’s Representation agreement is like an agreement to “go steady” during your home purchase. You agree to only work with your agent and your agent only works with you!
How much does it cost?
In most cases of properties listed on the MLS, the buyer’s agent is paid by the listing agent (through a “co-broke”– the offer for compensation as listed in MLS). The buyer’s agent is bound by contract to advocate for the best interests of the buyer (YOU) only! Occasionally, there are times when the buyer must pay out of pocket for representation—typically if the buyer is purchasing a “For Sale By Owner” property. However, with 99.9% of traditional brokerage listings, the buyer agent commission is paid out by the Listing Brokerage from their fee from the seller. Commission structures are not standardized and are negotiable. If there is a non-traditional purchase, fee schedules will be prepared well in advance, so there will be no surprises.
In most cases of properties listed on the MLS, the buyer’s agent is paid by the listing agent (through a “co-broke”– the offer for compensation as listed in MLS). The buyer’s agent is bound by contract to advocate for the best interests of the buyer (YOU) only! Occasionally, there are times when the buyer must pay out of pocket for representation—typically if the buyer is purchasing a “For Sale By Owner” property. However, with 99.9% of traditional brokerage listings, the buyer agent commission is paid out by the Listing Brokerage from their fee from the seller. Commission structures are not standardized and are negotiable. If there is a non-traditional purchase, fee schedules will be prepared well in advance, so there will be no surprises.
If I don’t use a buyer’s agent, won’t I save half the commission? Isn’t it cheaper if I call the phone number on the “For Sale” sign in the yard?
No. It will not save you a cent with a traditional purchase. The contract that the seller signs with the listing broker has no provisions for paying less if no other agent is involved. They agreed to pay a set fee when their home sells, regardless of whether there is a buyer’s agent. Can’t I buy the house cheaper if I call the agent whose name is on the sign? PROBABLY NOT! The listing agent is bound by contract to the seller and will be looking out for the seller’s best interest only – you will be on your own. They will offer no advice or opinions on your behalf, they will simply write up the offer amount that you tell them—and anything you say WILL be used against you in negotiations! The listing agent is required by law to tell the seller if you have indicated you will pay more or anything that could help out the seller during negotiations—and they will! Remember—they work for the seller, not YOU!
Who pays the commission if I use a buyer’s agent with a “for sale by owner” home?
Typically, the buyer’s agent will negotiate the commission terms in advance with the seller. Many FSBO sellers offer a buyer’s agent commission. A buyers agent when purchasing a FSBO can be worth their weight in gold, as many FSBO properties are erroneously priced and the sellers have little to no knowledge of real estate laws. However, if the seller will not make an advance commitment, there are a few options: You could add into the contract that the seller pays the commission, you could offer the seller a lower price and then pay the commission out of pocket. Discuss with your agent the possibilities.
I want a Buyer Rep! How do I get an Agent?
Call 903-729-7530 and we will get started! It is a very simple contract called a “Buyer’s Representation Agreement,” which outlines everyone’s expectations and compensation, so that we all know clearly what to expect! Think of it as “going steady” with a real estate agent during the transaction—she/he will be your contact point through the entire transaction.
No. It will not save you a cent with a traditional purchase. The contract that the seller signs with the listing broker has no provisions for paying less if no other agent is involved. They agreed to pay a set fee when their home sells, regardless of whether there is a buyer’s agent. Can’t I buy the house cheaper if I call the agent whose name is on the sign? PROBABLY NOT! The listing agent is bound by contract to the seller and will be looking out for the seller’s best interest only – you will be on your own. They will offer no advice or opinions on your behalf, they will simply write up the offer amount that you tell them—and anything you say WILL be used against you in negotiations! The listing agent is required by law to tell the seller if you have indicated you will pay more or anything that could help out the seller during negotiations—and they will! Remember—they work for the seller, not YOU!
Who pays the commission if I use a buyer’s agent with a “for sale by owner” home?
Typically, the buyer’s agent will negotiate the commission terms in advance with the seller. Many FSBO sellers offer a buyer’s agent commission. A buyers agent when purchasing a FSBO can be worth their weight in gold, as many FSBO properties are erroneously priced and the sellers have little to no knowledge of real estate laws. However, if the seller will not make an advance commitment, there are a few options: You could add into the contract that the seller pays the commission, you could offer the seller a lower price and then pay the commission out of pocket. Discuss with your agent the possibilities.
I want a Buyer Rep! How do I get an Agent?
Call 903-729-7530 and we will get started! It is a very simple contract called a “Buyer’s Representation Agreement,” which outlines everyone’s expectations and compensation, so that we all know clearly what to expect! Think of it as “going steady” with a real estate agent during the transaction—she/he will be your contact point through the entire transaction.
I hope this helps you to understand why using your own Agent is in your best interest! Whether you choose me as your Agent or another REALTOR, be sure to make sure YOUR interests are represented in the transaction!
Lisa E. Priest really loves houses and is an East Texas Area REALTOR® with Picket Fence Realty, Inc. You can reach her via phone 903-729-7530.
